Correlation Between Chia Hsin and Hunya Foods
Can any of the company-specific risk be diversified away by investing in both Chia Hsin and Hunya Foods at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Chia Hsin and Hunya Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia Hsin Cement and Hunya Foods Co, you can compare the effects of market volatilities on Chia Hsin and Hunya Foods and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Chia Hsin with a short position of Hunya Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Hsin and Hunya Foods.
Diversification Opportunities for Chia Hsin and Hunya Foods
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chia and Hunya is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Chia Hsin Cement and Hunya Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunya Foods and Chia Hsin is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Chia Hsin Cement are associated (or correlated) with Hunya Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunya Foods has no effect on the direction of Chia Hsin i.e., Chia Hsin and Hunya Foods go up and down completely randomly.
Pair Corralation between Chia Hsin and Hunya Foods
Assuming the 90 days trading horizon Chia Hsin Cement is expected to generate 1.38 times more return on investment than Hunya Foods. However, Chia Hsin is 1.38 times more volatile than Hunya Foods Co. It trades about 0.02 of its potential returns per unit of risk. Hunya Foods Co is currently generating about 0.0 per unit of risk. If you would invest 1,755 in Chia Hsin Cement on September 3, 2024 and sell it today you would earn a total of 40.00 from holding Chia Hsin Cement or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chia Hsin Cement vs. Hunya Foods Co
Performance |
| Timeline |
| Chia Hsin Cement |
| Hunya Foods |
Chia Hsin and Hunya Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Hsin and Hunya Foods
The main advantage of trading using opposite Chia Hsin and Hunya Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Hsin position performs unexpectedly, Hunya Foods can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hunya Foods will offset losses from the drop in Hunya Foods' long position.The idea behind Chia Hsin Cement and Hunya Foods Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hunya Foods vs. Standard Foods Corp | Hunya Foods vs. TTET Union Corp | Hunya Foods vs. Uni President Enterprises Corp | Hunya Foods vs. Charoen Pokphand Enterprise |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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